Send health insurance back to states, commissioner says

DES MOINES — Iowa’s insurance commissioner said Friday he has lost faith in Congress’ ability to fix the nation’s health care system.

Moreover, he believes it would be better if federal money was distributed among states as block grants so officials closer to the people most affected by the uncertainty could take needed action.

Commissioner Doug Ommen said there are a number of structural issues that need to be addressed — and addressed soon — to stabilize the insurance market, particularly for people with individual private coverage. But he added he doesn’t see a consensus building in Washington, D.C., to get that done.

“This has got to be fixed,” Ommen said during a discussion of the challenges facing affordability, access and other issues dogging the health care arena during a panel at The Gazette’s Iowa Ideas conference. “I’m a lot less optimistic that Congress can fix this and I’m sorry to say that.

“Sending it back to the states is probably our best option right now.”

Ommen is awaiting word after having submitted the state’s final plea — its stopgap proposal — to the federal government, asking for permission to make changes he believes will buoy Iowa’s struggling Affordable Care Act marketplace.

This November, the majority of the 72,000 Iowans purchasing plans through the exchange will have only one option — Minnesota-based Medica, which recently asked the state for an average rate increase of 56.7 percent due to the uncertainty over cost-sharing reductions.

Nick Gerhart, a former state insurance commissioner now working in the private sector, said there is a lot of anxiety as Iowans are getting insurance cancellation notices amid the current uncertainty.

“There are real people at the end of these contracts,” he said. “They’re getting crushed. They don’t know where to go. They don’t know where to turn.”

Under Iowa’s ACA marketplace, federal payments are made to insurers to help cover costs and expand access for low-income individuals — but the future of the payments are now in jeopardy.

Ommen’s stopgap proposal seeking a federal waiver seeks to provide consumers with age- and income-based tax credits as well as use a reinsurance mechanism for insurers for costly medical claims.

Ommen said the proposal is not meant to fix all the issues. But he believes it can stabilize the market by bringing more healthy and young individuals into the ACA marketplace, which would help better spread out costs.

In addition, the use of reinsurance would attract insurers back to the marketplace, he said.

Given the tight timeline — as open enrollment is rapidly approaching — Ommen said the state agency is moving forward as if it had been given the go-ahead.

“It’s crippling. It’s crazy,” he said of Congress’ inaction on the health care issue. “It’s uncharted waters in the middle of a hurricane.”

“The work we have, it doesn’t hold a candle to what families in Iowa are facing. This is really a serious problem.”